The operator of the Tally Ho Theatre in downtown Leesburg announced Friday that she will close it at the end of the year.

Judy Wilson said she decided to exercise her option to terminate her lease because of increased competition from other theaters and the cost of needed capital improvements.

"It's strictly an economic decision," said Wilson, who has run the Tally Ho for five years.

The building is owned by Acorn Property Development Tally Ho. Don Devine, a managing partner with the firm, said several companies have expressed interest in renting the property. One wants to continue to operate Tally Ho as a movie theater, while others are interested in converting it into a bank, a restaurant or a music venue featuring nationally known acts, he said.

Devine said he prefers at this point to keep the property a theater or turn it into a music venue.

"We're actually really excited, because the new theater group and the music venue are proposing to run things differently," Devine said, adding that the theater group would redesign the building.

"I think the Tally Ho is ready for a new look and a new era. I think it will be fantastic for Leesburg," said Devine, who plans to begin advertising the property in January.

The theater on West Market Street opened in 1931 and operated under various owners until the late 1990s, when it closed because of competition from national chains. Devine then bought the theater and began renting it to Wilson and a partner in 2002.

Since its reopening, the theater has screened popular movies, local documentaries and foreign films.

"I didn't know what to expect when I opened it," said Wilson, who has focused on offering entertainment that brings the community together. "The sad part for me is all the folks I've met and all the people who are loyal to the theater and how it will impact them. I'm glad to have been able to serve the community for five years."